On October 29, the securities regulatory authorities in Alberta,
New Brunswick, Nova Scotia, Ontario, Québec and Saskatchewan
(collectively, the "Participating
Jurisdictions") published Multilateral CSA Notice of
Amendments to National Instrument 45-106 Prospectus Exemptions
Relating to the Offering Memorandum Exemption (the
"OMExemption") to make
the offering memorandum exemption, found in section 2.9 of National
Instrument 45-106 available in all jurisdictions of Canada.
The OM Exemption allows an issuer to offer securities to certain
categories of investors without the requirement of a prospectus.
The investments permitted under this exemption, in the
Participating Jurisdictions where it is already available, are
currently limited to $10,000 except for eligible investors.
The purpose of securities regulatory authorities of the
Participating Jurisdictions was to harmonize it as much as possible
and they believe these changes will enhance access to capital while
strengthening investor protection.
Notable changes include the following additional protection
Additional investment limits applying to individuals (other
than those qualifying as accredited investor or under the family,
friends and business associates exemption).
A $10,000 investment limit per 12 month period for non-eligible
A $30,000 investment limit per 12 month period for eligible
A $100,000 investment limit per 12 month period for eligible
investors who receive advice from a portfolio manager, investment
dealer or exempt market dealer confirming the investment above
$30,000 is suitable
Let us recall that eligible investors
include individuals whose net assets, alone or with a spouse exceed
$400,000 or whose net income before taxes exceeded $75,000 (or, if
combined with that of a spouse, exceeded $125,000) in each of the 2
most recent calendar years and who reasonably expect to exceed that
income level in the current calendar year.
In addition, all investors using the
OM Exemption will have to complete a modified form 45-106F4
Risk Acknowledgment requiring that such investors confirm
their status (eligible investor, non-eligible investor, accredited
investor or investor that would qualify under the family, friends
and business associates exemption) and that such investors are
within the investment limit.
Requirement that non-reporting issuers provide to investors (i)
audited annual financial statements, (ii) annual notice describing
how the proceeds raised under the OM Exemption have been used and
(iii) a notice in the event of a discontinuation of the
issuer's business, a change in the issuer's industry or an
change of control of the issuer (New Brunswick, Nova Socia and
Requirement that marketing material be incorporated by
reference into the offering memorandum. This aims at providing
investors with the same rights of action in the event of a
misrepresentation in connection with all disclosure under the
These changes follow a comment period held in the Participating
Jurisdictions from March 20, 2014 to June 18, 2014 (except for Nova
Scotia, whose comment period went from May 7, 2015 to July 6). Some
of the changes that were first contemplated have been revised to
take into account the comments received, with a view to strike a
balance between access to capital and investor protection. It is
interesting to note that the Participating Jurisdictions have
harmonized their position on the investment limits since March
2014. The companion policy guidance proposed in the March materials
has been modified to reflect the changes since then.
Final amendments will come into force in Ontario on January 11,
2016 and in the other Participating Jurisdictions on April 30,
2016, allowing the issuers to complete their ongoing investments
and reflect on whether they wish to continue using the offering
memorandum exemption. Consequential amendments are made to National
Instrument 52-107 Accounting Principles and Auditing
Standards, National Instrument 45-102 Resale of
Securities and to Multilateral Instrument 11-102 Passport
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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